No one wants to devalue their product or service by reducing price, so why should you discount your price when you can let your competitors do that, and they can lose money serving that prospect.
In order to overcome a price objection though, you must absolutely believe that you add more value, provide better service, or sell a better product than your price-dropping competitors. If you can’t justify a higher price to yourself, you’ll never be able to convince a prospect that they’re getting a fair deal.
If your competitors always lower their prices, bring up the price objection early in the sales process, so you can determine that the buyer is looking for value and not just a cheap price. Educate the buyers to realize that there are three variables to consider when buying a product: service, quality, and price. If the person chooses price as one factor, which other one is he willing to give up?
If you ultimately decide you need to negotiate price, ensure you ALWAYS ask for something in return. For example, you can request a service contract, a referral, or a larger order. This will balance the deal and make it a win/win for both parties.